Amec and Foster Wheeler could combine in a major merger deal worth US $3.2 billion (UK £1.9 billion).

In a stock exchange statement in London, Amec said it had “provisionally agreed” outline terms for a recommended cash offer for all of Foster Wheeler’s shares based on US $32.00 for each Foster Wheeler share, equating to the transaction value of about $3.2 billion, which would be financed by existing cash and new debt, Amec says.

Amec says the deal would add “...mid and downstream capabilities to Amec’s existing upstream focus and bringing new customer relationships.”

Up to US $1.595 million (£968 million) of the offer would be satisfied by cash, with new debt, and by the issue of new Amec shares. If the merger is completed, Foster Wheeler shareholders would own up to 23% of Amec’s enlarged share capital.